A Depleted Legacy

By Curtis Lang on Jun 22, 1995

This article first appeared in Cite Magazine, a publication of the Rice University Design Alliance, in 1995. The Rice Design Alliance (RDA), established in 1973, is a non-profit organization dedicated to the advancement of architecture, urban design, and the built environment in the Houston region.

This past year, Allen Parkway Village has been in the news once again, for what may prove to be the last time.Over the past dozen years, the 50-year old public housing complex, Houston's largest, has become a familiar fixture in local newspapers.Through a series of efforts at demolition and redevelopment occurring under four mayors, Allen Parkway Village has generated seemingly unending lawsuits, public meetings, congressional hearings, even its own HUD amendment.It has attracted a large, diverse coalition of project residents, community ctivists from both the left and the right, academics, writers, documentary film makers, historians, preservationists, and religious and civic leaders.Allen Parkway Village has become such a cause c‚lŠbre -- even if the cause is lost -- because it embodies virtually all the problems at the Housing Authority of the City of Houston HACH) since the agency's first major scandal in 1953.HACH's mission is to provide low-income housing for the poorest of Houston's poor.A discrepancy exists between this legislated raison d'ˆtre and what HACH actually achieves.For the past 25 years and more, HACH has often been more successful in feeding tax dollars to developers and builders than in doing its mandated job.

HACH's Historical Roots

More than any other industrialized Western nation, the United States has traditionally looked to the marketplace to provide housing for its population.Houston's reliance on free-enterprise solutions to social problems makes the Bayou City a model for those studying the evolution of the American social contract vis-a-vis housing.Two watershed events in the first half of the 20th century established a substantial role for an activist government in the marketplace.But the current negotiations between Republicans and Democrats to transform federal housing policy suggest that the government's active role may well be abolished.Early in the century, the appearance of tenement reform laws forged a role for local governments to set standards and regulate housing safety. During the 1930s, New Deal reformers were convinced that the unregulated operation of the free market and philanthropy together could never provide housing for all Americans.They argued that public housing alone could deliver decent habitation for the poor."Even at its inception, public housing was a controversial idea, and President Franklin Roosevelt himself had to be coaxed," reports Tufts University professor Rachel G. Bratt. "There was strong opposition from...private homebuilders and savings and loan associations, who launched vigorous attacks on public housing, accusing it of being socialistic and representing unfair government competition with free enterprise....They played major roles in organizing local communities to oppose the siting of public housing."2Despite substantial opposition, Congress empowered the U.S. Housing Authority (USHA) in 1937 to fund local housing authorities, which would demolish slum neighborhoods and erect new housing complexes to replace them.3The next year the city of Houston and the state of Texas established Houston's housing authority, governed by a five-member board of commissioners appointed by the mayor for two-year terms.Unfortunately, the Housing Authority of the City of Houston (HACH) was created with a political structure that does not provide for oversight and accountability as safeguards against malfeasance.HACH was created by both state and local statutes as a public authority.Funded primarily by the U.S. Housing Authority (later the Department of Housing and Urban Development) and only supplemented by grants from the city of Houston, HACH is in budget and operation theoretically independent of the city.Although the mayor is ultimately accountable for what HACH does, the organizational charts of city government make it possible for him to claim to have only limited influence over that happens at HACH and only limited responsibility for a state-chartered public authority funded and audited by a Washington cabinet agency.This insulates the mayor frompolitical heat resulting from any HACH mismanagement.Because HACH is a bureaucracy that answers to three different sources of power, it is a difficult target for reformers at any level.Where authority is diffused, so are responsibility and accountability.During the period from 1940 to 1944, HACH built 2,215 racially segregated public housing units.For black residents HACH opened Cuney Homes in Third Ward (across from the future site of TSU) in 1940 and Kelly Courts in Fifth Ward in 1941; for white residents it built Irvinton Courts, also in Fifth Ward, in 1942.4The crown jewel of HACH's empire was San Felipe Courts.Designed by a group of Houston architectural firms led by MacKie & Kamrath and completed in 1944, San Felipe Courts was designed to enhance the beauty and commercial utility of one of Houston's most important civic corridors, Allen Parkway, a scenic boulevard winding alongside Buffalo Bayou that connects downtown Houston with the city's planned suburb for the well-off, River Oaks.In 1988, the project was listed in the National Register of Historic Places as a historic district of national significance.5Houston's housing authority built the 1,000-unit San Felipe Courts (renamed Allen Parkway Village in 1964) as low-income public housing with money from the United States Housing Authority. But in April 1941, Congress created the Division of Defense Housing to provide low-income housing near crucial defense plants, and when construction on San Felipe Courts began in 1942, the complex was designated as temporary defense housing.It was lived in by families of defense workers until 1947.In order to build the 37-acre complex, a section of Fourth Ward, Houston's oldest African American neighborhood, had to be razed, triggering vociferous protests from the displaced residents. That San Felipe Courts was designated from its inception as a whites-only project only fanned the flames.6After World War II, an increasing number of white Houstonians came to share Fourth Ward's antipathy to the housing authority.In 1950, when Mayor Oscar Holcombe asked the voters of Houston to approve the construction of 5,000 more units of public housing, a bitter battle ensued, with opposition coming from the homebuilders' and savings and loan lobbies, as well as groups that opposed public housing for ideological reasons.The Council for Free Enterprise, which organized against the referendum, warned voters that public housing was opening the doors to "socialistic or communistic forms of government."7Houston voters defeated Holcombe's proposal.The voters' rejection of the funding proposal effectively put the brakes on HACH.The fifth public housing complex, Clayton Homes, located in the East End near the foot of Navigation Boulevard, was in the planning stages prior to Holcombe's referendum.It was completed in 1952 only because philanthropist Susan Vaughan Clayton donated the property on which it was built.No new public housing would be built by HACH for the next 23 years.HACH's problems were not just with public acceptance.In 1953, Ervin W. Blum, executive director of HACH for the previous ten years, was convicted of extorting bribes in connection with awarding construction contracts for Clayton Homes.Blum's trial revealed that the HACH board of commissioners had been derelict in exercising oversight, and that federally funded programs to benefit low-income residents at San Felipe Courts were suppressed so that the HACH staff could use the funds and property for personal purposes.Blum was convicted and sent to federal prison, and four of the five members of the board of commissioners resigned.8By early 1956, a third of San Felipe Court's 1,000 units were vacant.Eligible white families opted not to live there because of the complex's isolation from schools, churches, and shopping.9 There was no dearth of African American families who would have been happy to live there; all-black Cuney Homes and Kelly Courts were fully occupied and had waiting lists of qualified applicants needing housing.In 1956 the NAACP called on HACH to integrate San Felipe Courts.The housing authority refused to rent any of the 340 vacant apartments at San Felipe Courts to African Americans, claiming that to do so would cause an exodus of white families into substandard market housing.

HACH in the Seventies

When Lyndon B. Johnson signed the Housing and Urban Development Act of 1968, the nation committed itself to providing 26 million new or substantially rehabilitated housing units over the next decade,11 and HACH resumed activity after its long nap with the 1975 opening of the Sharpstown-area Bellerive project for the elderly with HUD support.12Johnson's Civil Rights Act of 1964 ensured that Bellerive would be a racially integrated project.During the next seven years, all the rest of Houston's 11 low-income housing projects would be built.Despite the Civil Rights Act, HACH still engaged in racial policies -- just less overtly.When integration was mandated, HACH opened up some apartments to African Americans in Allen Parkway Village (which by then accounted for roughly a quarter of all Houston public housing), but reserved a significant number of units for whites, even though it often meant the units lay empty.HACH eventually dropped that policy in the late sixties and early seventies, and Allen Parkway Village became predominantly African American.Then -- and only then -- was it suggested that maintaining a housing project on that site was not a good idea.As HACH director Robert Moore explained in a 1977 letter to HUD proposing demolition of the project, "[Allen Parkway Village's land values have]escalated beyond a cost where housing is the highest and best use."13HACH began to make plans for the sale of the project.Selling the land along Allen Parkway would provide a cash windfall for HACH while encouraging major private-sector development -- always one of City Hall's primary goals.A secret September 1977 housing authority report sent from Mayor Fred Hofheinz's office to HUD, tantalizingly entitled "Project S," discussed a possible $3.5 million relocation of Allen Parkway Village residents and sale of the project to private interests. The money thus gained, Houston officialsargued, would fund a subsequent $27.8 million building program to create new public housing and a $40.5 million program to rehabilitate existing housing stock -- all at no cost to the federal government.14But Patricia Roberts Harris, HUD secretary under President Jimmy Carter, opposed the plan as part of a policy against disposing of low-income property if the property could be salvaged. Countering the HACH proposal, HUD authorized $10 million in 1979 for the modernization of Allen Parkway Village.But both the Project S proposal and the modernization plan went nowhere.15During this period, HACH developed an odd new strategy for raising money.In 1979 it created affiliated subsidiary companies, the Houston Apartment Housing Corporation and Houtex, whose mission was to raise money for HACH by purchasing troubled apartment complexes, repairing them, and renting units at market rates -- essentially functioning as a private, for-profit developer, but financing the venture with tax-free notes.16The housing corporations' first project was to buy the 327-unit St. Regis apartment complex at San Felipe and Midlane for $8 million, with another $4 million spent on renovations.17Far from making money to subsidize low-income housing, the St. Regis cost the HACH subsidiary close to $2.5 million over a six-year period.The complex was sold in 1990.18

HACH in the Eighties

In 1981, with Ronald Reagan newly inaugurated and a free-market revolution sweeping America, the timing seemed perfect for a second attempt by HACH -- working under Mayor Jim McConn -- to sell Allen Parkway Village.HACH would receive cash for new entrepreneurial projects, and the city would get credit for sparking a massive development project that would extend downtown Houston halfway up Allen Parkway toward River Oaks.In short, the mayor could join the ranks of the private developers who have shaped large chunks of the city.Accordingly, HACH sent another confidential memo to HUD requesting permission to demolish Allen Parkway Village.McConn admitted later that Kenneth Schnitzer -- who developed Allen Center, Greenway Plaza, and the Summit -- was the developer most interested in acquiring Allen Parkway Village from the city.Schnitzer confirmed that he had arranged to purchase the land for $63 million.A confidential housing authority study conducted in 1982 estimated the value of Allen Parkway Village at more than $250 million, so McConn would have had a friend for life in Kenneth Schnitzer if the deal had been completed.19Meanwhile, in Washington, assistant housing secretary Philip Winn, later to figure prominently in the HUD scandals of the 1980s, approved the secret HACH request to demolish Allen Parkway Village.But Irving Statman, then head of the Dallas regional office of HUD, and his deputy, Elbert Winn (no relation to Philip), disturbed that HUD investigators had uncovered monumental mismanagement at HACH, pestered Mayor McConn for months to clean up the agency."I told them, `You've got a terribly run, fiscally irresponsible staff here,'" Statman told reporters."I made my plea to the [HACH] board.They turned a deaf ear on me."20Statman went public with the results of a damaging HUD audit, dated 10 July 1981, which showed that in 1979, 1980, and 1981 HACH failed to record checks totaling $1.3 million and recorded another $2.5 million worth of checks twice.Furthermore, the general fund cash balance was off by more than $800,000.This was not unusual for HACH: the audit disclosed that the agency had failed to balance its bank statements since 1977.21HUD's auditors concluded that HACH had no viable cash controls and no accounting system adequate to support an audit.Further, they found that HACH had no routine maintenance program for low-income projects, and that HACH had not done the required modernization and repairs at Allen Parkway Village, having improperly used designated modernization funds for other purposes.HACH had spent $564,632 of the $10 million available through HUD for preparation of a complete set of construction documents to modernize Allen Parkway Village.The only money actually spent on the complex went for boarding up vacant units.Despite an initial uproar about the HACH scandal, neither City Hall nor Houston's news media launched major investigations to discover who had received the $1.3 million HACH disbursed via unrecorded checks.In November 1981, Kathryn J. Whitmire defeated Jim McConn and immediately moved to clean house at HACH.As in 1953, all members of the board of commissioners resigned.Whitmire's new board was chaired first by H.J. Tollett, Jr., and then by Gerry Pate, a Houston engineer who was one of the new mayor's top fundraisers.HACH tried to build three new scattered-site garden-apartment projects under Pate but in each case was stymied by neighborhood groups.22Mayor Whitmire hired Earl Phillips to be HACH's executive director, ostensibly because of his "insider" connections to HUD assistant secretary Jim Baugh.(Baugh was later indicted on federal conspiracy, bribery, and conflict-of-interest charges.)23Given a mandate to clean house at HACH, Phillips started by firing HACH official George N. Kyle in May 1983 for various swindles that included soliciting fake bids from contractors and collecting $2.4 million in excess rents.Oddly, the dismissal did not trigger a broader investigation.24In September 1983, HACH released a report on Allen Parkway Village and Fourth Ward that was endorsed by a blue-ribbon commission of citizens including Gladys M. House, Jew Don Boney, George Greanias, James Ketelson, and Robert Mosbacher, Jr.The report recommended demolition of Allen Parkway Village and preparation of a comprehensive redevelopment program that would reshape Fourth Ward, although it did not address the concerns of historical preservationists.But the timing was wrong.The most ambitious developer interested in the area at this point was Mayor Whitmire.Savvy commercial real estate developers already knew that the market in Houston for new, large-scale developments had disappeared in a glut of new office space, apartments, and other construction that was still under way as the bottom fell out of the international oil market and Houston's economy.Kenneth Schnitzer and other major developers publicly downplayed the value of Allen Parkway Village and of Fourth Ward redevelopment in general, in response to the city's plans.25In 1985, Whitmire's planning department director, Efraím García, acting as broker for a consortium of Fourth Ward property owners, offered the whole neighborhood for a publicly subsidized, privately undertaken redevelopment package.Fourth Ward activist Gladys House succeeded in having nearly half the neighborhood designated as a National Register Historic District, complicating García's plans to use federal funds to relocate Fourth Ward residents.The crash in Houston's real estate market took care of the rest.There was no developer interest in a massive city-sponsored, urban-renewal-style redevelopment of Fourth Ward.Yet the city's manifold problems with Allen Parkway Village and Fourth Ward redevelopment had not quenched the housing authority's thirst for real estate development.In late 1986, HACH board of commissioners chairman Gerry Pate unveiled plans for a public-private partnership to rehabilitate the former Holiday Inn on Memorial Drive, across Buffalo Bayou from Allen Parkway Village, to provide low-income housing for the elderly.26Robert A. Mosbacher, Jr., who enjoyed remarkable connections in the Reagan administration, lobbied HUD on behalf of the project, and HUD promised $18 million in subsidies for the redevelopment as another public-private partnership.27By 1989, however, this project too had soured.It was over budget by $2.2 million, prompting local papers to complain that no budgets or reliable accounting information were available from HACH for the project.28Although this was the identical problem that had caused the McConn-era HACH scandal to erupt, and although Whitmire, Pate, and Phillips had all promised to clean HACH's house, the agency still lacked basic accounting systems.HUD pulled out of the Holiday Inn redevelopment project, which then fell apart in May 1989.The old hotel remains an empty hulk to this day.29

HACH in the Nineties

The bursting of the great Texas real estate bubble of the 1980s took with it many of the state's banks, savings and loans, and developers, rendering any potential Fourth Ward development plan by the city worse than redundant.The downturn also caused further problems for HACH's"entrepreneurial" ventures.In 1990, HACH's 1970s investments in unsubsidized housing in the form of suburban apartment complexes, such as the St. Regis and four others, unraveled, costing the FDIC $7 million; blame was pinned on the downturn in the rental market.30And HACH was still unable to manage its basic accounting.HUD forced the unrepentant agency to disgorge refunds amounting to $270,000 to public housing residents for "overcharges."31Undeterred by market realities, American General and Cullen Center, two corporations interested in Fourth Ward redevelopment since 1987, announced plans in 1990 for Founders Park, a 600-acre development of upscale townhouses and apartment buildings along with shopping, offices, and a series of town squares, parks, and small lakes -- all to be built in Fourth Ward and on the site of Allen Parkway Village.32This plan was predicated on HACH's sale of Allen Parkway Village to private-sector interests.In response, Allen Parkway Village Resident Council president Lenwood E. Johnson proposed rehabilitation of Allen Parkway Village "followed by emergence of small community businesses that would result in gradual economic development."Working with University of Houston architecture instructor Nia Dorian Becnel, Johnson and Fourth Ward residents began to make a counterproposal, based on grassroots improvements rather than displacement and redevelopment, called the Allen Parkway Community Campus concept.Improved housing and sweat equity would enable Fourth Ward residents to redevelop their neighborhood to meet their own needs.Because of HACH's inability to sell the Allen Parkway Village property, the Founders Park plan would never leave the drawing boards.The community campus plan is still being cited in current negotiations, as the wrangling continues between saving the public housing project versus commercial development.(See "Update: Allen Parkway Village," p. 14.).As of 1991, HACH was administering far fewer public housing units than San Antonio, Newark, Baltimore, and other much smaller cities.33It had a system-wide vacancy rate of 32 percent, largely because of the number of units it was holding vacant at Allen Parkway Village, a number that had increased substantially after HACH began systematic depopulation in 1983.Moreover, HACH had received roughly $16.8 million in subsidies and other funds generated by the operation of units in Allen Parkway Village up to 1991 (the figure is calculated by multiplying the per-unit subsidy figures reported in court records by the number of years from 1983 to 1991).This money was to have beenspent on maintenance and repair.HACH's own consultants noted in a 1991 report that HACH records showed there had been no major repairs at Allen Parkway Village since 1981.If HACH did not spend the money on modernization, where did it go?Who, specifically, received it?Are there records?The entire political landscape in Houston changed when Bob Lanier defeated Kathy Whitmire and took over at City Hall in November 1991.Neither candidate made Allen Parkway Village or HACH a major issue.Bob Lanier was a supporter of the Founders Park plan for Fourth Ward-Allen Parkway Village redevelopment, which died because HACH could not finesse the demolition and "disposition" of Allen Parkway Village.But Lanier did not offer to enter into a public-private partnership with his fellow real estate developers.Founders Park advocates assumed that the area's strategic importance would be bolstered by Metro rail proposals given great visibility in the late 1980s, and by a possible statewide high-speed bullet train with a terminal in the redevelopment zone.It turned out that Bob Lanier hated rail.Founders Park, Metro rail, and bullet trains all disappeared into the dustbin of history, along with the comprehensive planning and zoning that Whitmire had touted.Lanier has done little to undo HACH's dismal record.Houston now ranks last among all large American cities in housing assistance to poor families.34HUD auditors have recommended that HACH repay $1.5 million for "misused housing funds."HUD auditors found that HACH still has no credible maintenance program and that 89 percent of all units inspected did not meet quality standards. HUD found that the poor condition of the housing projects was caused not by tenant abuse, but rather by poor maintenance.35In other words, nothing had changed at HACH since the 1952 scandal.A succession of Houston mayors has failed to administer HACH in a responsible manner, allowing millions of dollars to disappear without a trace.Neither taxpayers nor public housing residents have benefited from this type of public housing authority.

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